Laurent v. Pricewaterhousecoopers LLP

• Decision Date: 08 August 2013
• Docket Number: No. 06 Civ. 2280(JPO).,06 Civ. 2280(JPO).
• Citation: 963 F.Supp.2d 310
• Parties: Timothy D. LAURENT, Plaintiff, v. PRICEWATERHOUSECOOPERS LLP, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

963 F.Supp.2d 310

Timothy D. LAURENT, Plaintiff,

v.PRICEWATERHOUSECOOPERS LLP, et al., Defendants.

No. 06 Civ. 2280(JPO).

United States District Court, S.D. New York.

Aug. 8, 2013.

Eli Gottesdiener, Gottesdiener Law Firm, PLLC, Brooklyn, NY, for Plaintiff.

Douglas G. Smith, Robert J. Kopecky, Kirklan & Ellis LLP, Chicago, IL, Lauren Oland Casazza, Kirkland & Ellis LLP, New York, NY, for Defendants.

OPINION AND ORDER

J. PAUL OETKEN, District Judge:

This case involves claims against Defendant PricewaterhouseCoopers (“PWC”) under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (2000) (“ERISA”), relating to PWC's Retirement Benefit Accumulation Plan for Employees of PriceWaterhouseCoopers LLP (“the RBAP”). Plaintiffs Timothy Laurent and Smeeta Sharon allege that the RBAP violates ERISA's vesting and accrual standards by defining its “normal retirement age” as five years of service. They also allege that the summary plan description (“SPD”) is defective and that it violates ERISA's general fiduciary standards provision. These claims, most of which were addressed and held to survive a previous motion to dismiss in an opinion issued by Judge Mukasey on September 5, 2006, Laurent v. PriceWaterhouseCoopers LLP, 448 F.Supp.2d 537 (S.D.N.Y.2006) (“ Laurent I” ), are alleged in Plaintiffs' Second Amended Complaint (“SAC”). Seven years after Judge Mukasey issued his ruling, PWC has filed a motion to dismiss the SAC, pointing to intervening decisions from other circuits and reiterating its objections to Laurent I. For the reasons that follow, PWC's motion to dismiss is denied.¹

I. Applicable Legal StandardsA. Rule 12(b)(6)

To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a plaintiff must plead sufficient factual allegations “to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The Court must accept as true all well-pleaded factual allegations in the complaint, and “draw [ ] all inferences in the plaintiff's favor.” Allaire Corp. v. Okumus, 433 F.3d 248, 249–50 (2d Cir.2006) (internal quotations omitted). That said, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. In a summary of the plausibility standard, the Second Circuit explained that:

[Twombly ] stated that a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, but mere labels and conclusions or formulaic recitations of the elements of a cause of action will not do; rather, the complaint's factual allegations must be enough to raise a right to relief above the speculative level, i.e., enough to make the claim plausible.Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir.2010) (quoting Twombly, 550 U.S. at 555, 570, 127 S.Ct. 1955) (quotation marks and internal citations omitted).

B. Law of the Case Doctrine

Any questions of law ruled upon earlier in this litigation are revisited through the lens of law of the case doctrine, which provides that “when a court has ruled on an issue, that decision should generally be adhered to by that court in subsequent stages in the same case.” United States v. Uccio, 940 F.2d 753, 758 (2d Cir.1991) (citing Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983)). This doctrine serves the purpose of “maintain[ing] consistency and avoid[ing] reconsideration of matters once decided during the course of a single continuing lawsuit.” 18 Wright, Miller & Cooper, Federal Practice and Procedure § 4478 at 788. It thus plays an important role in the administration of the federal courts, though “unlike the doctrines of res judicata and collateral estoppel, which a court cannot ignore where they apply, the law of the case, as Justice Holmes remarked, ‘merely expresses the practice of the courts generally to refuse to reopen what has been decided.’ ” Devilla v. Schriver, 245 F.3d 192, 197 (2d Cir.2001) (quoting Messinger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 56 L.Ed. 1152 (1912)).

Law of the case doctrine is prudential and discretionary in character, see United States v. Williams, 205 F.3d 23, 34 (2d Cir.2000), and courts “always [have] the power to change a ruling” in light of “further reflection,” Corporacion de Mercadeo Agricola v. Mellon Bank Int'l, 608 F.2d 43, 48 (2d Cir.1979); see also United States v. Birney, 686 F.2d 102, 107 (2d Cir.1982) (“The doctrine of the law of the case is not an inviolate rule.”). That rule holds true even where a case has been reassigned to a new judge. See In re U.S., 733 F.2d 10, 13 (2d Cir.1984). Under law of the case doctrine, the principal bases for departure from a prior ruling include “an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.” Doe v. New York City Dep't of Soc. Servs., 709 F.2d 782, 789 (2d Cir.1983). Courts remain sensitive in this context to the potential for prejudice that can result from a lack of notice or “a lack of sufficient opportunity to prepare armed with the knowledge that the prior ruling is not deemed controlling.” Uccio, 940 F.2d at 758 (quotation marks, citation, and alterations omitted).

II. Discussion²A. Count One: Defining Normal Retirement Age As A Term of Years

Count One alleges that the RBAP-defined “normal retirement age” (“the RBAP NRA”) of five years of service is invalid under ERISA. The parties' dispute over the validity of the RBAP NRA is subject to law of the case doctrine. In September 2006, relying principally on Duchow v. New York State Teamsters Conference Pension and Ret. Fund, 691 F.2d 74 (2d Cir.1982), Judge Mukasey concluded that the RBAP NRA is invalid. See Laurent v. PriceWaterhouseCoopers LLP, 448 F.Supp.2d 537, 545 (S.D.N.Y.2006)( Laurent I );see also id. (“The RBAP does not specify one consistent age as the normal retirement age ... each employee will be a different age at the time he reaches the normal retirement age. Such a normal retirement age is invalid under the Second Circuit's interpretation of ERISA.”). Nearly one year later, after a reassignment from Judge Mukasey, Judge Daniels denied a motion for reconsideration of Laurent I, but certified Judge Mukasey's opinion for interlocutory appeal. See Laurent v. PriceWaterhouseCooper LLP, No. 06 Civ. 2280, 2007 WL 2363616, at *1 (S.D.N.Y. Aug. 17, 2007)( Laurent II ). Ultimately, the Second Circuit refused to hear an interlocutory appeal. In December 2010, Judge Daniels denied Defendants' request for reconsideration of his opinion denying their original motion for reconsideration of Judge Mukasey's ruling. See Laurent v. PriceWaterHouseCoopers LLP, No. 06 Civ. 2280, 2010 WL 5396089, at *1 (S.D.N.Y. Dec. 22, 2010)( Laurent III ).

Upon an independent examination of the merits, the Court reaffirms Laurent I's result, though it departs somewhat from Laurent I's reasoning. Laurent I relied on Duchow to conclude that the RBAP NRA violated ERISA, but upon careful reflection it is clear that Duchow and the other sources cited in Laurent I lend only modest support to that conclusion. Of course, the conclusion that Laurent I's reasoning cannot control does not end the inquiry. Rather, a decision must be reached as to whether the RBAP NRA is invalid for some other reason. Considering the positions advanced by the parties, as well as the logic of recent Fourth and Seventh Circuit cases, the Court identifies another such basis in ERISA's plain text and embraces Laurent I's result.

1. Relevant ERISA Provisions

ERISA § 3(24) defines normal retirement age as follows:

The term “normal retirement age” means the earlier of—

(A) the time a plan participant attains normal retirement age under the plan, or

(B) the later of—

(i) the time a plan participant attains age 65, or

(ii) the 10th anniversary of the time a plan participant commenced participation in the plan.

29 U.S.C.A. § 1002(24). Section § 203 of ERISA, in turn, creates minimum vesting standards:

(a) Nonforfeitability requirements

Each pension plan shall provide that an employee's right to his normal retirement benefit is nonforfeitable upon the attainment of normal retirement age and in addition shall satisfy the requirements of paragraphs (1) and (2) of this subsection.

(1) A plan satisfies the requirements of this paragraph if an employee's rights in his accrued benefit derived from his own contributions are nonforfeitable.

(2) A plan satisfies the requirements of this paragraph if it satisfies the requirements of subparagraph (A), (B), or (C).

(A) A plan satisfies the requirements of this subparagraph if an employee who has at least 10 years of service has a nonforfeitable right to 100 percent of his accrued benefit derived from employer contributions.

(B) A plan satisfies the requirements of this subparagraph if an employee who has completed at least 5 years of service has a nonforfeitable right to a percentage of his accrued benefit derived from employer contributions which percentage is not less than the percentage determined under the following table: (table omitted).

(C)

(i) A plan satisfies the requirements of this subparagraph if a participant who is not separated from the service, who has completed at least 5 years of service, and with respect to whom the sum of his age and years of service equals or exceeds 45, has a nonforfeitable right to a percentage of his accrued benefit derived from employer...